Is It Good To Buy NFO?

Pros Of Investing In NFO

• Fresh investment opportunity - NFOs introduce a new mutual fund scheme, allowing the investors to be a part of the investment since its inception.
  
  
• New investment strategy - NFOs capitalise on emerging and new trends in the financial investment market, providing unique opportunities to investors. Furthermore, every NFO has a unique strategy aligned to a specific investment objective and risk profile.
  
  
• Initial offer price - NFOs are available for purchase for a specific period. The offer price is generally ₹10 for the NFO and appears lucrative for any individual planning to start their investment journey.
  
  
• Diversified portfolio - Every NFO has a unique combination of asset classes, bringing in a diversified mix of investment opportunities. Thus, it can suit a broad range of investors with varying risk profiles, from high risk to low risk.
  
  
• Potential for higher returns - As the NFOs focus on specific investment objectives and emerging trends, they have the potential to give higher returns long term.
  
  
• Professional fund management - NFOs are introduced and managed by professional fund managers having substantial experience in the financial investment market. It increases the chances of achieving specific investment goals with wealth appreciation over time.

Factors To Consider Before Buying NFO
 

• Future financial goals and risk appetite - Before buying an NFO, investors need to assess their future investment goals and the level of market and financial risk they can accommodate throughout the investment period. It will help in determining the right NFO option for the wealth creation initiatives.
  
  
• Reliability of the fund house - Although the performance of the NFO or the mutual fund scheme cannot be analysed, researching the reputation of the fund house should be a must step.
  
  Tracking the record of the previous fund options and their growth will help in gauging the extent of professional management and reliability.
  
  
• NFO Investment Strategy and Risk Profile - Every NFO will be launched with a specific investment objective. Investors need to check if that aligns with their expectations of the asset allocation, investment objective, and risk profile.
  
  
• Offer Price and Period - The NFO is available for purchase for a specific period at an offer price of ₹10. Know the open and close date for the NFO and make timely decisions.
  
  
• Minimum Investment and Withdrawal - The minimum investment or the number of units that need to be purchased and the withdrawal rules or the lock-in period can differ for the NFOs. It is essential to know these details to plan a long-term financial commitment.

What Happens After Buying NFO?

After the NFO period, the investors will be allotted the units purchased if there is no discrepancy. And it will be the time for the official launch of the mutual fund scheme.

Investors will then be allowed to trade units on the stock exchanges at the Net Asset Value (NAV).
 

If the NFO is close-ended, the entry and exit to the mutual fund scheme will not be applicable. On the other hand, if it is open-ended, investors can decide to enter or exit the investment at any time.

Conclusion

Investing in an NFO can undoubtedly be a good and wise investment decision for investors seeking long-term wealth creation. As the options are wide-ranging, affordable, flexible, and have unique investment strategies, they can align with individual investor's financial objectives and risk tolerance levels.

Furthermore, it is managed by expert fund managers with professional and industry experience. Therefore, with careful consideration and thorough research, investors can steer the mutual fund investment journey with the NFO for their planned financial goals!